TaxTMI 
TaxTMI 
2026 (2) TMI 926
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....o material was provided to the appellant and thus violated principle of natural justice. 4. Ld. NFAC ought to have deleted addition as statements, material relied on and cross examinations was not provided to the appellant. 5. Ld. NFAC erred in law and on facts in passing order in summary manner without recording finding on merits. ........ ........ 9. The reopening of assessment u/s 148 of the Act is invalid and required to be quashed." 3. The facts of the case are that the assessee filed its original return of income for the year under consideration on 06.09.2014 declaring total income of Rs. 20,06,810/-. Subsequently, based on information received from the DDIT (Investigation), Unit-1(3), Ahmedabad, the Assessing Officer reopened the assessment by issuing notice u/s 148 of the Act on 30.03.2021, alleging that the assessee was a beneficiary of accommodation entries amounting to Rs. 1,00,00,000/- from concerns allegedly controlled by Shri Sanjay Shah and Shri Jignesh Shah. The reopening was based on a search action conducted u/s 132 of the Act on 11.09.2018 in the case of the aforesaid persons, wherein unaccounted cash and digital ev....
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.... also found in possession of accommodation entry provider duo. During recording of their statements and by filing affidavits, various dummy directors admitted that they were merely signing documents on directions of operators. They admitted of being involved in providing accommodation entries of LTCG, Loss, Unsecured Loans etc. Data analysis coupled with circumstantial evidences led to discovery that 15 BSE listed scrips have been used for generating bogus LTCG and contrived losses. During investigation, sample trail of funds was also established wherein the infrastructure of shroffs and angadiyas was used by the duo for routing unaccounted funds of beneficiaries. The duo also admitted being involved in providing accommodation entries including bogus LTCG and contrived losses. On perusal of information so received, it is noticed that the assessee is one of the beneficiaries who has obtained accommodation entry of Rs. 1,00,00,000/- in the form of fictitious loan from Shri Jignesh Shah wherein a search action was carried out by the Investigation Wing of Ahmedabad which is required to be brought to tax. Failure on the part of the assessee to disclose fully and truly all the m....
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....e information received from Dy. Director of Income Tax (Iny.). Unit-1(3), Ahmedabad, You have not provider copies of statements of Shri Sanjay Shah and Siri Jignesh Shah 4) On merits also, we would like to draw your kind attention to the fact that information on the basis of which you have recorded reason for reopening the assessment for A.Y. 2014-15 is completely wrong. You have mentioned in the reasons as under: "On perusal of information so received, it is noticed that the assessee is one of the beneficiaries who has obtained accommodation entry of Rs. 1,00,00,000/- in the form of fictitious loan from Shri Jignesh Shah wherein a search action was carried out by the Investigation Wing of Ahmedabad which is required to be brought to tax. Failure on the part of the assessee to disclose fully and truly all the material facts necessary for the assessment, the income of the assessee has escaped assessment to the tune of Rs. 1,00,00,000/- for the AY 2014-15 within the meaning of Section 147 of the Income-tax Act, 1961. 1 have, therefore, reason to believe that this is a fit case for reopening the assessment u/s. 147 of the Act and for issue of notice u/s. 148 of the I....
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.... kinds such as unsecured loans, share premiums, penny scripts, bogus gains, contrived losses etc. It is found that as per data available on the records, such companies/concerns were found to be non-existent at their respective addresses. Moreover, above mentioned companies/concerns are not carrying out genuine business activities. On perusal of the information, it is found that the assessee is one of the beneficiaries who has availed /obtained accommodation entries of Rs. 1,00,00,000/- under various head from various concerns who are controlled and managed by above persons. 2. Since, the assessee has not offered the above income for taxation, the case was reopened u/s. 147 of the Act by issuing notice u/s. 148 of the Act dated 30.03.2021. The assessee filed return of income against the notice u/s. 148 of the Act on 19.04.2021. Thereafter, notice u/s. 143(2) rws 147 of the Act along with reasons recorded for reopening was issued to the assessee on 19.05.2021. On receipt of the notice u/s. 143(2) of the Act, the assessee filed objection against the reopening on 31.05.2021. The objection raised by the assessee was duly disposed off by this office by passing a speaking order o....
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....MS Excel files, incriminating Word files, Whatsapp Chats/Images and documents including KhataBahis were also found and duly analysed. Stamps and bank accounts of various persons were also found in possession of accommodation entry provider duo. During recording of their statements and by filing affidavits, various dummy directors admitted that they were merely signing documents of Directors of operations. They admitted of being involved in providing accommodation entries of LTCG, Loss, Unsecured loans etc. Data analysis coupled with circumstantial evidences led to discovery that 15BSE Listed scrips have been used for generating bogus LTCG and contrived losses. During investigation, sample trail of funds was also established wherein the infrastructure of shroffs and angadiyas was used by the duo for routing unaccounted funds of beneficiaries. The duo admitted being involved in providing accommodation entries including bogus LTCG and contrived losses. 5. On perusal of information, it is found that the assessee, is one of the beneficiaries and made transactions during F.Y. 2013-14 relevant to A.Y. 2014-15. The information disseminated by the Investigation wing in respect of t....
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.... (Disallowance of Rs. 1,00,00,000/-)" 7. Aggrieved by the order of the Assessing Officer, the assessee preferred an appeal before the Ld. CIT(A) who dismissed the appeal of the assessee, observing that assessee was a beneficiary of accommodation entries. The Ld. CIT(A) held as under:- "2. The grounds of appeal object to addition of Rs. 1,00,00,000/- u/s 69A as unexplained money of the assessee. 2.1 On carefully examining the information received from DDIT(Inv), 1(3), Ahmedabad and also on perusal of the same, it is seen that a search action u/s. 132 of the Act was carried out in the case of Jigar Shah and Sanjay Shah/Shroff of Ahmedabad. It is further worth to mention that the above persons are managing and controlling multiple companies and concerns which are not carrying out any genuine business activity and involved in providing accommodation entries of various kinds such as unsecured loans, share premiums, penny scripts, bogus gains, contrived losses etc. 2.2 On perusal of the information, it is found that the assessee is one of the beneficiaries who has availed /obtained accommodation entries of Rs. 1,00,00,000/- under various head from various co....
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....gedly adopted by the said persons, the Assessing Officer has not brought on record any incriminating material, document or evidence which directly links the assessee with the alleged accommodation entry transactions. The reasons recorded merely state that "the assessee is one of the beneficiaries" without disclosing how, on what basis and on the strength of which evidence such a conclusion has been drawn. The expression "beneficiary" is used as a label, not as a finding supported by material evidence in the case of the assessee. The date of receiving of loan, amounts, cheque number, bank account from which the cheques have been issued, bank account in which the cheques have been encashed are flagrantly missing. Such reopening, based on vague and non-specific information, reflects borrowed satisfaction and not an independent formation of belief as required under section 147 of the Act. 11.1 We also find blatant inconsistencies in the stand of the Assessing Officer viz. in the reasons recorded for reopening, the allegation is that the assessee received a fictitious unsecured loan of Rs. 1,00,00,000/- from Shri Jignesh Shah. However, in the assessment order, the nature of transacti....